Korea pension fund to pump W250b into Titleist brand

Korea’s state pension fund is said to inject at least 250 billion won ($234.3 million) into a Korean-led consortium for its project to buy Titleist golf brand, industry sources said Sunday.

The group led by Fila Korea Ltd. struck a deal with Fortune Brands Inc. in May to take over the U.S.-based liquor firm’s golf equipment unit Acushnet for $1.23 billion. Other partners include Mirae Asset Private Equity, the Government Employees Pension Service and Korea Development Bank.

Acushnet is one of the world’s top golf gear firms and the maker of Titleist golf balls, FootJoy shoes and gloves, as well as Scotty Cameron putters. Sales surpassed $1.2 billion last year, nearly half of which from outside the U.S.

The Korean investors are yet to reveal the complete list of financiers and their investment value. But officials and reports expect Fila Korea to bring in about $100 million and the GEPS nearly $19 million on top of the funding from the National Pension Service.

Furthermore, private equity firm Blackstone Group LP, another bidder for the deal, is said to have agreed to provide $100 million. Mirae Asset has reportedly entered negotiations with China Investment Corp., a Chinese sovereign-wealth fund, over the amount of investment.

“(The investor consortium) is being formed smoothly,” a senior official at Fila was quoted as saying. “It will be finalized in mid-July at a funding committee meeting.”

Mirae Asset declined to comment on details of the acquisition process, saying that it is “in private negotiations (with a number of potential investors) to nail down the final list.”

The spin-off deal came several months after the maker of Jim Beam and Maker’s Mark whiskies took steps to concentrate on its drinks operations.

It would also help bolster Fila Korea’s sports apparel and equipment business, market observers said. The company purchased a long-term license to use the Italian brand in 2007.

The NPS, the world’s fourth-largest pension fund manager, operates an estimated 340 trillion won worth of assets at home and abroad as of April.

It aims to lift the stake of its overseas assets to 20 percent of total by 2015 from around 12 percent at the end of 2010, it said early this year.

As part of efforts to diversify its portfolio, the agency set up an office in Manhattan last month.

By Shin Hyon-hee (heeshin@heraldcorp.com)